Logic, expectation and consensus
It is very difficult to get a thorough understanding of an industry and a company. What more people can understand is only their own industry and company. So, more often, watch more and move less. We have very limited access to information. And it's probably a one-sided message that someone else intentionally sends you. Every company keeps delivering good information to the outside world while keeping negative information sealed.
Whether a stock can rise depends on many factors, more on a combination of forces, a consensus behind it. Analyzing the company's fundamentals, we find that it is undervalued and has the logic of rising, which is far from enough. There are reasons for undervaluation. Don't rush to buy an undervalued stock when you find it. Low valuation is also given by the market, low natural reason. There must be factors that suppress stock price rises - even if you don't see what is suppressing stock price rises.
Buying and selling are transactions. When you buy it, someone must be selling it. It can be seen that people's differences exist all the time. The divergence at this moment determines the direction of individual stocks. If the difference is too big, the market will not go far. From the perspective of game theory, the stability of chips is very important. Only when everyone is optimistic will there be a situation of "sellout". If you want to buy, and no one sells, you can only increase the price to buy, which is the trading factor of stock price rise. Only when the holders are reluctant to sell and want to buy, can the stock price be pushed up.
What we need is more consensus on the rise of stock prices. Once consensus is formed, it is not difficult for the stock price to form an upward trend, and the industry can go far. The consensus here refers more to the consensus at the level of funds, which is the consensus of large funds. The short-term trend of stocks is more driven by capital. Everyone votes with the money in hand. Whoever has more chips will have more influence. Big money, between risk and return, considers risk more than return. So certainty is the key.
With the changing market environment, there will always be people who find opportunities ahead of the market. But the opportunity at this time is not entirely an opportunity, and more people need to see and recognize this opportunity. The stock price can only be boosted by continued intervention from the latter. If you see opportunities before others and prove your judgment right afterwards, you do see opportunities. But if your judgment is not recognized by others, the so-called opportunity is likely to be a trap.
Why do we all like White Horse, because those white horse companies have already proved their excellence, and a lot of people have studied them thoroughly, the masses have a good foundation, hold security assurance, consensus is easy to form. Holding a white horse is a comfortable thing, based on the principle that a good company will probably be excellent in the future. The process of black horse company from black horse to white horse is also a process of consensus formation. In this process, more and more people are optimistic, more and more consensus will bring very rich excess benefits. White horse is reassuring, black horse brings excess profits. But if you don't pay attention, the so-called black horse can easily become a trap.
Therefore, research companies, on the basis of making correct judgments, have to wait for consensus formation. The formation of consensus and the change of consciousness take a long time. Unless you believe in it from the very beginning, it is undoubtedly a difficult task to get people to abandon prejudices and change their opinions.